The complex network of connections linking the world together leaves the global economy highly exposed to natural and man-made disasters, according to a new report from the influential think-tank the Organisation for Economic Co-operation and Development (OECD).
"Global shocks", be they from diseases, ash clouds, earthquakes or sub-prime financial crises, pose new and complicated challenges for policymakers due to the ease at which they can spread across the increasingly interconnected world.
The report, entitled "Future Global Shocks," identified five major risks – pandemics, cyber attacks, a financial crisis, civil unrest and geomagnetic storms which would disrupt satellite communications.
The OECD warned that the scale of connections and the speed with which people, goods and data travel makes such events more risky than in the past.
To combat the spread of future disasters, policymakers must develop systems that assess the "risks present in large-scale system interdependencies".
"Surveillance has now emerged as a key component in risk assessment and management," the report said.
Increased global co-ordination is vital, and early-warning systems must be developed to "stop threats before they proliferate worldwide".
Economic interdependency is already closely monitored, the OECD said. "Less visible are the drivers of vulnerabilities that tightly weave interconnections between commercial supply chains, technological systems and investment vehicles underlying the global economy.
"Unanticipated events such as natural disasters, failures in key technical systems or malicious attacks could disrupt these complex systems and produce shocks that propagate around the world."
The OECD cited events such as the 2003 SARS outbreak and last year's wildfires in Russia.
SARS "spread quickly from Hong Kong around the world as travellers caught the virus and then flew home", the report said.
The fires in Russia led to price spikes in global food markets, which "eventually triggered social unrest in the Middle East," it argued.
Source: http://www.telegraph.co.uk
"Global shocks", be they from diseases, ash clouds, earthquakes or sub-prime financial crises, pose new and complicated challenges for policymakers due to the ease at which they can spread across the increasingly interconnected world.
The report, entitled "Future Global Shocks," identified five major risks – pandemics, cyber attacks, a financial crisis, civil unrest and geomagnetic storms which would disrupt satellite communications.
The OECD warned that the scale of connections and the speed with which people, goods and data travel makes such events more risky than in the past.
To combat the spread of future disasters, policymakers must develop systems that assess the "risks present in large-scale system interdependencies".
"Surveillance has now emerged as a key component in risk assessment and management," the report said.
Increased global co-ordination is vital, and early-warning systems must be developed to "stop threats before they proliferate worldwide".
Economic interdependency is already closely monitored, the OECD said. "Less visible are the drivers of vulnerabilities that tightly weave interconnections between commercial supply chains, technological systems and investment vehicles underlying the global economy.
"Unanticipated events such as natural disasters, failures in key technical systems or malicious attacks could disrupt these complex systems and produce shocks that propagate around the world."
The OECD cited events such as the 2003 SARS outbreak and last year's wildfires in Russia.
SARS "spread quickly from Hong Kong around the world as travellers caught the virus and then flew home", the report said.
The fires in Russia led to price spikes in global food markets, which "eventually triggered social unrest in the Middle East," it argued.
Source: http://www.telegraph.co.uk
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